Under Armour CEO and founder Kevin Plank is still doing Trump-related damage control.
Plank has struggled to figure out his company’s messaging in President Donald Trump’s America. First, he expressed enthusiasm for Trump in an interview with CNBC, calling him a “real asset for the country” due to his pro-business stance. But last week, after a #BoycottUnderArmour hashtag began circulating on social media and as some of the company’s athletes spoke out publicly against Plank’s comments , Under Armour issued a release clarifying that it supports unity. “We engage in policy, not politics,” the company said.
Plank is in something of a bind. On one hand, he wants to work with the Trump administration to advocate on policy, especially as it relates to trade and U.S. manufacturing jobs, both issues that are critical to Under Armour’s business. But working closely with Trump—who some voters view as sexist, racist and homophobic—could hurt the Under Armour brand. That’s especially alarming considering Under Armour is highly reliant on younger, millennial shoppers, a demographic that tends to be more socially liberal than the overall American population.
Under Armour’s Trump-related backpedaling continued on Wednesday, with the Maryland-based sports retailer taking out a full-page ad in the Baltimore Sun featuring comments written by Plank himself.
Addressing the city of Baltimore, he wrote: “In a business television interview last week, I answered a question with a choice of words that did not accurately reflect my intent. I want to clarify to our hometown exactly the values for which Under Armour and I stand.” He went on to add the following:
“We stand firmly for equal rights. We believe that immigration is a source of strength, diversity and innovation for global companies based in America like Under Armour.” He also promised that Under Armour would publicly oppose the travel ban and take a public position on legislation around the country “in support of the interests of our teammates whenever policy conflicts with human rights.”
These statements come after several Under Armour-sponsored athletes, including NBA star Stephen Curry, ballerina Misty Copeland and actor/former professional wrestler Dwayne “The Rock” Johnson, issued statements that sharply conflicted with Plank’s pro-Trump comments.
The negative attention couldn’t come at at worse time for the brand. Late last month, its shares plunged around 25% after the company reported disappointing holiday sales and issued an underwhelming sales target for 2017. Even before Plank’s pro-Trump remarks, there were concerns Under Armour was struggling to compete with Nike (NKE) and Adidas (ADDYY).
Some fear the brand has taken a further hit.
“Commentary by the CEO in a CNBC interview in a polarized political climate, and pointed response by Stephen Curry, The Rock and Misty Copeland make it nearly impossible to effectively build a cool urban lifestyle brand in the foreseeable future,” wrote SIG Susquehanna analyst Sam Poser in a note to clients. He downgraded the stock to “negative” from “neutral” and slashed his price target to $14 a share from $24.
Poser added that “Regardless of CEO Plank’s political views or whether his comment was meant to be a Trump endorsement or a general opinion, we believe the decision to express a view in today’s highly charged political climate was a mistake.”